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US Republicans face internal disagreements over Trump tax cut package
By Bo Erickson - 5/13/2025
By Bo Erickson
WASHINGTON (Reuters) - Republicans in the U.S. House of Representatives on Tuesday will kick off public debate on major pillars of President Donald Trump's tax cut and budget legislation, navigating choices that may strain their narrow majority.
The plan, which would extend tax cuts passed during Trump's first term, could add trillions of dollars to the nation's $36.2 trillion in debt over the next decade. Congress' bipartisan Joint Tax Committee estimates the tax cuts would cost $3.72 trillion. They also plan to boost spending on border security and national defense, adding further to the plan's total cost.
Lawmakers aim to partly offset the lost revenue by canceling many of Democratic former President Joe Biden's green energy initiatives and tightening eligibility for food and health safety-net programs that serve tens of millions of low-income Americans.
Some Republicans caution that it could erode support among voters that elected Trump in November and handed the party control of Congress.
Republicans hold a narrow 220-213 House majority, and will need to stay united to pass a measure that Democrats are criticizing as hurting social programs.
The Republican tax plan would extend the tax cuts passed during Trump's first term and includes several of his campaign promises, including temporary tax breaks for tipped income, overtime and interest paid on some car loans and an additional tax break for seniors.
Some tax writers, including Representative Kevin Hern from Oklahoma, argue the new tax cuts are "essential" to fulfill Trump campaign promises to lower- and middle-income Americans who voted in greater numbers for Trump in November. The party will need their support in the 2026 midterm elections, when control of Congress will be up for grabs.
Fiscal hawks within the party argue that the bill does not include sufficient spending cuts, while some Republican representatives from high-tax coastal states are pushing to raise a $30,000 deduction limit for state and local taxes.
UNIVERSITIES TARGETED
The Republican proposal takes aim at some of Trump's favorite targets. It would increase taxes on university endowments, end incentives for electric vehicles, wind power and other green energy, and exclude many immigrants from tax incentives and health programs.
Democrats in the minority are rallying to defend Medicaid, as Republicans in a separate committee hearing on Tuesday are set to argue that the health program that serves 71 million people would not suffer from their plan to tighten eligibility and require some recipients to work. That would reduce spending by $715 billion and kick 7.7 million people off the program, according to the nonpartisan Congressional Budget Office.
Republicans on the House Energy and Commerce committee, which oversees Medicaid, will face questioning from Democrats who object to new limits on funding for groups like Planned Parenthood that facilitate abortion services. Other conservative priorities could be dropped if they inhibit support from some Republicans.
Republicans also plan to increase work requirements for those who receive SNAP food benefits and shift some costs to states. That would save $230 billion but likely reduce enrollment in the program, which serves 41 million people.
House Speaker Mike Johnson is pushing his party to pass the package, which amounts to Trump's major legislative priority, out of the House by Memorial Day on May 26, less than two weeks away.
The country's looming debt ceiling deadline this summer is also pushing Republicans to work fast. The package would raise the debt limit by $4 trillion and Treasury Secretary Scott Bessent has urged lawmakers to act by mid-July to avoid a default that would upend the global economy.
(Reporting by Bo Erickson; Writing by Andy Sullivan; Editing by Scott Malone, Lincoln Feast and Alistair Bell)